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Glossary

Chip

A chip is a small piece of silicon with billions of tiny switches, the transistors, on which a computer calculates and remembers. AI chips are built to do the huge amount of computation behind AI models quickly.

A chip, or integrated circuit, is a small slice of silicon carrying billions of minuscule switches: transistors. By switching them on and off, a computer calculates and remembers data. Every phone, car and server contains dozens of chips. You can think of a chip as a city on a postage stamp, with streets, junctions and storerooms that all work together.

How does it work?

Chips are made by printing patterns with light onto a wafer of silicon, layer by layer. Sizes are expressed in nanometres, billionths of a metre. The smaller the components, the more fit in the same space. That usually makes a chip faster and more economical, although it also depends on the design.

Running an AI model means a great deal of computation that can be done at the same time. That is why data centres use chips that are good at this, such as Nvidia's graphics chips. In addition, companies design their own AI chips. A chip also needs memory, and the closer that sits to the computation, the faster things go.

Why it matters

Chips determine how fast and how cheap AI can become. At a major data centre trade show, the American company d-Matrix showed that an AI model answers faster when ordinary graphics chips and its own chips share the work, each doing the part it is good at (link).

It is also about who can make the chips. Japan gave TSMC the go-ahead to make 3-nanometre AI chips in Kumamoto from the end of 2028, the first time in that country (link). Meanwhile China is showing how far it has got with its own chips: there, the company Sugon linked 100,000 domestically made computing cards into a computing cluster (link). Reports like these show that chips are not just technology, but also decide where computing power for AI becomes available.

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